Mario Draghi called on the ECB to make its biggest push yet to fend off deflation & revive the
economy by unleashing a debt-buying spree of €1.1T ($1.3T). He & the Executive Board proposed
spending €50B a month thru Dec 2016, 2 euro-area
central-bank officials said. The plan still faces a tense debate in the
Governing Council & may change before the final decision tomorrow. By urging Fed-style
quantitative easing, Draghi is remodeling the ECB as an aggressive
central bank that will take risks even against the wishes of Germany,
the region’s biggest economy. Bundesbank President Jens Weidmann &
Executive Board member Sabine Lautenschlaeger have argued QE isn’t
needed & reduces the incentive of govs to make structural
reforms. Draghi’s intention is to expand the balance sheet to the level seen in early 2012 (€3T). While the
central bank has assets of about €2.2 currently, that may
shrink as €200B of outstanding long-term loans mature in
coming weeks. The
council’s debate will be complicated by arguments over whether the
risks incurred in the new bond-buying plan should be shared across the
region’s 19 central banks or kept within national boundaries. Dutch
central-bank Governor Klaas Knot has said any decision to mutualize risk
should be taken by elected politicians, not unelected central bankers. Tension over that issue surfaced this week at a conference in Dublin when the Irish Finance Minister said having national central banks buy gov bonds would be “ineffective.” That drew a response from ECB Executive Board member Benoit Coeure. “The
discussion is how to design it in a way that works, in a way that makes
sense,” Coeure said. “If this is a discussion about how best to pool
sovereign risk in Europe,
and how to make the pooling of sovereign risk take a step forward in an
environment where the governments themselves have decided not to do it,
then this is not the right discussion.”

Microsoft, a Dow stock, CEO
Satya Nadella showed the world the role of Windows in
the future & he is taking the future part seriously. At a preview of its Windows 10 operating system today, the
software maker unveiled a version called Windows Holographic,
along with a headset with glasses called HoloLens that will let
users see holograms while tracking a user’s voice, motion &
surroundings. The company also showed HoloStudio, software for
creating holograms, then 3-D printing & sharing them. MSFT Is working with NASA's Jet Propulsion
Laboratory on the
holographic technology, & the lab will use it for Mars
exploration starting in Jul. The world’s largest software maker is the latest company to
join the push into augmented & virtual reality. Using MSFT's new holographic tools, architects could
walk around their designs while clients are viewing it remotely,
a spokesman for MSFT’s
operating system group said. A surgeon could learn a procedure
without ever picking up a scalpel. “In software, nothing is impossible,” he continued.
“Holographic computing enabled by Windows 10 is here.” The company has been building the holographic
technology for years &
HoloLens glasses will be available “in the Windows 10 time
frame.” MSFT showed a demo today in which an employee wore the
headset & created a quad-copter design while clicking &
tapping in the air. A screen showed what she could see in front
of her. A concept video also showed how holographs can be used
for building work project models & for playing video-game
Minecraft. Augmented reality differs from virtual reality in that AR
projects virtual images onto pictures or video of the real
world. Virtual reality is completely computer-generated. Examples of the kind of things technology companies expect
to become commonplace thru augmented reality in the future
include customers taking a picture of a sofa in a store, then
seeing how it looks overlaid on an image of their living room, & getting driving directions in the form of arrows & signs
that appear to be on the road. The stock fell 47¢. If you would like to learn more about MSFT, click on this link:club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7

Microsoft (MSFT)

Netflix's $9.5B drive to
dominate video streaming worldwide is paying off after it said yesterday that it
will profitably reach all 200 of the countries that have
broadband internet services within 2 years. “We then intend to generate material global profits from
2017 onwards,” CEO Reed Hastings & his
finance chief, David Wells said. The outlook reassured investors who have expressed concerns
about the company’s narrow margins, widening interl
losses & a budget for films & TV shows that’s swollen to
$9.5B from $7.3B in the past year. Intl subscriber growth outstripped gains in the
US for the 3rd straight qtr, as Hastings raced to plant
his flag before other would-be competitors. Users outside the
US expanded by a record 2.4M in Q4,
reaching 18.3M. NFLX expects to add another 2.25M intl
customers in Q1. It already has more than 5M users
in Latin America, the most detailed number it has given
regarding intl subscribers. Licensing issues may inhibit Netflix’s expansion into
China, he added. The company is exploring its options, & any
investment will be modest. Q4 revenue rose 26% to $1.48B,
compared with a projection of $1.49B. EPS
almost doubled to $1.35, aided by a
tax benefit. Domestically, the company added 1.9M new customers
to reach 39.1M, compared with the 1.85M predicted.
That brought the worldwide total to 57.4M. In Q1, NFLX forecasts 1.8M new US
customers & EPS will be 60¢. The stock soared more than $60 (17%). If you would like to learn more about NFLX, click on this link:club.ino.com/trend/analysis/stock/NFLX?a_aid=CD3289&a_bid=6ae5b6f7

Netflix (NFLX)

Traders are betting Mario will throw even more money out to stimulate economies in Europe. Not all agree which may bring a good fight to watch tomorrow. Free money is not what makes for bull markets that are made to last. At least that is what they used to teach in school. However free money in the US has given it one of the best bull markets in history. If those rules have not changed there could be a day of reckoning.